Grains Mixed on Better Crop Conditions and Hopes for US Grains Demand

Technical indicators are signaling a bullish extension is gaining momentum in the daily chart. The positive sentiment is even more prominent in the 1-hour chart with oscillators and moving average pointing to the upside too.
Mauricio Carrillo
Grains Mixed on Better Crop Conditions and Hopes for US Grains Demand
Grains Mixed on Better Crop Conditions and Hopes for US Grains Demand

Soybeans, corn, and wheat are trading mixed on Wednesday as grain investors are digesting news from the USDA regarding crop ratings and US grain exports.

Soybeans higher amid robust export inspections

ZW1 Wheat futures 1-hour chart September 4

Soybeans are trading positive for the third day in a row, but the movement remains in a small range between 8.60 and 8.80. Investors welcomed news about an increase in export inspections.

The U.S. Department of Agriculture reported they inspected 1.28 million metric tons of soybeans for overseas delivery between August 23 and 29, which was a 33% increase from the previous seven days and also an increase from the 776.277 metric tonnes reported in the same period of 2018.

Soybean investors are taking the news as a signal that the demand from U.S. supplies has started to grow again.

Besides, the weekly crop report was released and showed that soybeans crop remained unchanged with a 55% rated good/excellent, which is considerably lower than the 66% a year ago. Soybean blooming and pods are also below five-year averages.

In that framework, futures of soybeans attempted a decisive run overnight, but the unit was capped at 8.74. Then, it started to fall to current levels around 8.69. Soy is currently flat on the day.

However, the odds have changed for soybeans as technical indicators are signaling a bullish extension is gaining momentum in the daily chart. The positive sentiment is even more prominent in the 1-hour chart with oscillators and moving average pointing to the upside too.

If the pair holds above the 8.68, it will recover until the 8.74 again. Then, 8.78 is waiting for the unit.

To the downside, below the 8.68, soybean contracts will find buying interest at 8.62 and 8.60.

Corn extends decline for the fourth day

ZC1 Corn futures 1-hour chart September 4

Futures of corn are trading lower again on Wednesday as investors crop conditions have improved in the last week. Corn is now heading to test August 14 low at 3.58.

Corn crops were rated 58% good or excellent, above the 57% condition the previous week. According to the USDA, corn was in dough stage at 81%, well below the 93% in the five-year average.

Earlier in the day, corn was trading slightly positive, but after failing at the 3.63 level, it started to fall and it broke Tuesday’s lows at 360 and extended drops to the current 3.59. Corn is now 0.50% negative in the day, trading at lows of the session.

Technical indicators suggest that the unit is oversold so that a brief bounce could be expected. However, both the 1-hour and the daily chart suggests more dovishness.

If corn consolidates levels below 3.60, next support will be at 3.58, followed by 3.55 and 2.50. Any potential upside will need the unit to break above 3.63.

Wheat pared gains at 4.60, back to test 4.55

ZW1 Wheat futures 1-hour chart September 4

Futures of wheat are showing some signal of being alive with its first positive session in the last five trading days. On Wednesday, wheat is consolidating losses after the declined performed since August 28 high around 4.78.

The USDA reported that U.S. spring wheat harvest is 55% completed, well above the 78% average by this time in the previous five years.

Early in the day, wheat tested the 4.60 in an attempt to recover more ground from Tuesday minimums at 4.50. However, the unit was rejected by the 4.60 area, and contracts were sent to be traded at 4.55.

The unit is still 0.45% positive in the day, but technical indicators are signaling that the upside recovery is not too active. A retest of the 4.50 area is expected unless the unit breaks above the 4.60 resistance.

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